Ken Lewis was ousted as chairman of Bank of America last night by shareholders frustrated with his leadership.
Mr Lewis will remain as chief executive of the largest bank in the US after the board unanimously expressed support or him to stay on as CEO. Walter Massey, a director, will take over the chairman's role.
Mr Lewis, who has headed the bank for eight years, was earlier given a long round of applause as he entered BofA's annual shareholder meeting in its native Charlotte, North Carolina, and speakers expressing support for his re-election were greeted with cheers.
Rebel shareholders have been campaigning against Mr Lewis, saying a reckless acquisition spree has wrecked the company, forcing it on the mercy of the US government, which has extended $45bn (£30bn) in emergency loans to save it from collapse. In particular, they are furious at the agreement to buy Merrill Lynch for $50bn last year, and the fact that BofA did not disclose spiralling losses at the investment bank in the days before the deal closed on 1 January. He won re-election to the board by "a wide margin", according to a spokesman.
In a carefully worded speech, designed to serve equally well as a valediction or as a manifesto for another year at the helm, Mr Lewis said his controversial acquisitions of Merrill Lynch and Countrywide would prove great long-term investments, but that they would be the last for the foreseeable future.
"Countrywide and Merrill Lynch are two of the most important reasons Bank of America is the most profitable financial services company in the US so far this year," Mr Lewis said. "These acquisitions are not mistakes to be regretted. Both are looking more and more like successes to be celebrated."
He was due to celebrate 40 years with the company this year, he told the 2,000-strong meeting, and had seen BofA alternate between periods of fevered acquisition activity followed by organic growth.
BofA is in discussions with the US government about whether it must raise billions of dollars more to cover possible further losses at Merrill Lynch and in its own retail bank, should the recession worsen.
Evelyn Davis, the veteran corporate governance campaigner who was the first speaker from the floor yesterday, gave her endorsement to Mr Lewis, winning loud applause.
"One should never change the captain of the ship when facing a hurricane or a tornado – and in today's environment we are in a hurricane and a tornado," she said.
But the chief executive did come face to face with numerous angry shareholders, including those who argued he should have scrapped the Merrill deal when he found out about the spiralling losses there, instead of giving in to pressure from the Treasury secretary and the head of the Federal Reserve to go ahead with the deal.
Kenneth Murphy, representing the SEIU service-workers union, told Mr Lewis he had "betrayed the trust placed in you by the owners of this company ... We need to make changes and bring integrity back into the executive suite."
In his speech, Mr Lewis said the discussion over the takeover of Merrill was taken by "good people with good intentions" on all sides. "Any assumption that without Merrill, our stock price or dividend would be where it was in December is terribly mistaken," he added.